8-K: Sanmina Reports Q1 Fiscal 2024 Results, Revenue at $1.87 Billion

Sanmina Corporation announced its first quarter fiscal 2024 financial results, with revenue of $1.87 billion and a non-GAAP diluted EPS of $1.30.

Summary

• Sanmina Corporation reported its financial results for the first quarter of fiscal year 2024, which ended on December 30, 2023.
• The company's revenue for the quarter was $1.87 billion.
• GAAP operating margin was 4.7%, while non-GAAP operating margin was 5.5%.
• GAAP diluted earnings per share (EPS) was $0.98, and non-GAAP diluted EPS was $1.30.
• Cash flow from operations was $126 million, and the company ended the quarter with $632 million in cash and cash equivalents.
• Sanmina repurchased 2.1 million shares for $106 million during the quarter.
• The company's non-GAAP pre-tax return on invested capital (ROIC) was 22.7%.
• Sanmina's outlook for the second quarter of fiscal 2024 includes revenue between $1.825 billion and $1.925 billion.
• GAAP diluted EPS is expected to be between $0.95 and $1.05, and non-GAAP diluted EPS is expected to be between $1.20 and $1.30 for the second quarter.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The company met expectations for the quarter and is optimistic about the second half of the year. However, there is a decrease in revenue and net income compared to the previous year, which tempers the positive outlook.

Positives

• The company's first quarter financial results were in line with their outlook.
• Sanmina is confident in its market-focused strategy and its positioning for long-term financial success.
• The company expects to see sequential improvement in the second half of the fiscal year.
• Sanmina generated strong cash flow from operations of $126 million.
• The company has a healthy cash balance of $632 million.

Negatives

• The company's revenue decreased compared to the same quarter last year, with net sales of $1,874.798 million compared to $2,355.808 million.
• GAAP net income attributable to common shareholders decreased to $57.068 million from $92.014 million in the same quarter last year.
• The company's outlook for the second quarter is essentially flat with the prior quarter.

Risks

• The company's future sales and net income can be variable due to significant uncertainties.
• Sanmina relies on a small number of customers for a substantial portion of its sales.
• The company faces risks arising from its international operations.
• Geopolitical uncertainty, including the war in Ukraine and conflict in the Middle East, could impact the company.
• Adverse changes to the key markets the company targets could affect results.

Future Outlook

Sanmina expects second quarter fiscal 2024 revenue to be between $1.825 billion and $1.925 billion, with GAAP diluted EPS between $0.95 and $1.05 and non-GAAP diluted EPS between $1.20 and $1.30. The company anticipates sequential improvement in the second half of the fiscal year.

Management Comments

• Our team did a great job delivering first quarter financial results in line with our outlook, stated Jure Sola, Chairman and Chief Executive Officer.
• We are confident in our market-focused strategy and continue to position the company for long-term financial success.
• Our outlook for the second quarter is essentially flat with the prior quarter and is in line with our expectations for the first half of fiscal 2024.
• We believe we will see sequential improvement as we move into the second half of the year.

Industry Context

Sanmina operates in the Electronics Manufacturing Services (EMS) market, serving sectors like industrial, medical, defense, aerospace, automotive, communications networks, and cloud infrastructure. The results reflect the current market conditions and the company's performance within this competitive landscape.

Comparison to Industry Standards

• Sanmina's non-GAAP operating margin of 5.5% is within the range of other EMS providers, but specific comparisons would require detailed analysis of competitors like Jabil, Flex, and Celestica.
• The company's ROIC of 22.7% is a key indicator of its capital efficiency, and this should be compared to the ROIC of its peers to assess its relative performance.
• The revenue of $1.87 billion is a significant figure in the EMS industry, but its growth rate and profitability need to be benchmarked against competitors to determine its competitive position.
• The share repurchase program of $106 million is a common practice among public companies, but its impact on shareholder value should be evaluated in the context of the company's overall financial strategy.

Stakeholder Impact

• Shareholders will be interested in the company's performance and future outlook.
• Employees will be impacted by the company's financial health and strategic direction.
• Customers will be concerned with the company's ability to deliver quality products and services.
• Suppliers will be affected by the company's purchasing decisions and financial stability.
• Creditors will be interested in the company's ability to meet its financial obligations.

Next Steps

• Sanmina will hold a conference call on January 29, 2024, to review the financial results and outlook.
• The company will continue to execute its market-focused strategy.
• Sanmina will focus on achieving sequential improvement in the second half of the fiscal year.

Key Dates

Keywords

Sanmina, manufacturing solutions, financial results, revenue, operating margin, EPS, share repurchases, cash flow, ROIC, outlook